I’m helping someone write a paper in which she has to arrive at a conclusion that franchising is a better business option than a conventional business.
I would appreciate some input from you all, some highlights on the pros and cons of franchises, and your general observations.
Merci.
Re: Franchises
brand image is important, and franchising gives that to you right away, essentially you are riding teh coat tails of others and using that to your benefit. (e.g. X2's subshop vs quiznos or subway)
where it does not apply is if you want a specialty image for a local market, although many times those speciality local businesses then become franchisesthemselves (california pizza kitchen for example)
the service is so generic that a brand really does not matter or has not really been established 9e.g. a shoe repair shop or drycleaners)
con of franchises- startup and ongoign franchise fees, having to abide by comany policies
Re: Franchises
PRos:
they business is already a non big company so u dont have to strugle to run ur bizness and u dont even have to advertise as the headquarter would be already doing it on national tv for all the outlets.
eg, if u get a franchise of mcdonalds or star bucks, wat r the chances of ur bizness failing?? close to none eh and u dont have to struggle advertising and putting on sales and everything to attract the customer cuz that part company has already done decades ago.
Brand loyalty is a huge positive aswell. if i like the subway in toronto, when i go to hamilton m gona eat it there aswell.
cons
the amount of time it takes to approve ur file to get a franchise is minimum 1 year for a reputed company and in some cases goes upto 4 years in case of companies like Tim hortons, with this type of crazy time periods u can advertise and run ur own bizness aswell.
cost of getting a franchise is much much higher than opening ur own bizness. eg) popeyes chicken require $500,000 US dollars for their franchise but if u open a fast food retail urself , all the equipment and everything is gona cost u around $120,000 US dollars.
Re: Franchises
Please don't sue me if I steal your sentences, monsieurs. Thanks a ton.
Doesn’t that money buy you their “sign”, their “theme” as well overall store outlook (in and out)… and their supplies, and their “recipe” (
)?
Re: Franchises
^^^ it sure does, u just give them the money, thats it, they buld the store, they buy the appliances they want from ur money, and charge u the franchise fee and etc, this is the stuff that i mentioned in the pros, and wat i told u in cons is that its much more expensive to get a franchise instead of starting ur own biz, cuz if u start ur own food retail all the equipment and everything is gona cost u around 120,000, and if u go with franchise it costs u 500,000 for an average company like popeyes chicken